Loan scheme - Initiative of charity must be praised

Many people faced with exceptional family events, down on their luck, or in dire need of money, feel that they have no choice but to borrow from moneylenders, loan sharks, or even use credit cards, because they cannot get the money through normal lending agencies.

It may seem like an easy way out, but they end up paying the money back at exorbitant rates of interest. The majority do not even realise that they may be paying up to 150% interest per annum.

A survey by the financial regulator a couple of years ago found that 80% of those who borrowed from moneylenders did not compare interest rates beforehand, and 71% did not even know the actual interest rate they were paying. Many are quite content with the service and have no problems meeting their repayments.